Kyrgyz minister stepping down over failure to settle Kumtor mine issues

Centerra Gold’s Kumtor mine. (Image from archives)

Kyrgyz Prime Minister Joomart Otorbaev announced Thursday he is stepping down, amid renewed controversy over the country’s largest gold mine, Kumtor, owned by Canada’s Centerra Gold (TSX:CG).

According to Reuters, the minister’s decision was triggered by his inability to settle an ongoing dispute with the Toronto-based miner over Kumtor’s ownership. For over two years the parties have been in talks on a deal to swap the government’s 32.7% stake in Centerra for half of a joint venture that would control the Kumtor gold mine.

Otorbaev, who earlier this month withdrew his backing for such 50/50 joint venture, told reporters the direction of his government was “correct”, but added there was “a need to move on” and that Kumtor was the main unresolved issue, Radio Free Europe reports.

Kumtor, which lies near the Chinese border at an altitude of 4,000 metres, has been a source of political tension in the impoverished country.

The vast open pit gold mine accounts for 60% of the nation’s industrial output and, according to Centerra, it is expected to produce 470,000-520,000 ounces at a all-in sustaining cost between $819-$908 per ounce this year.